Tax Credits From Car Donations

Posted on Thursday 23 December 2010

Disposing of used cars can be done effectively through car donations. Making car donations can be done by getting in touch with a donation company and arranging for the disposal of your car. A donation is faster and easier than selling an old car in the market.

Therefore, this donation helps to avoid all the hassles that arise when you want sell your old car. This contribution of yours can help a non profit organization and also bring smiles on the faces of needed people.

Car donations allow you to help people who are less fortunate and at the same time afford you valuable tax deductions. Poor people who depend on these car charity organizations also deserve to get the joy of life. The government gives you the leeway of enjoying tax deductions equal to the value of your donated car. Every body becomes happy because of this act. Each party gains something in this process. In this way these donations have great significance.

A key to this undertaking would be to first find out the amount of tax deduction you would be credited before making the actual donation. In the United States for instance, there are federal laws that delineate the tax deductions for car donations. In these laws, there are discussions as to the two possible amounts for your tax deductions, namely, the fair market price and the gross sales amount of your car. A proper study of all the rules is essential.

Before the tax laws of 2005, the fair market value of the car was pegged for the value of the car. This was acceptable until the government realized that the owners were misdeclaring the value of their cars for purposes of increasing their tax deductions unnecessarily and denying information as to the makes and models of cars to determine their conditions.

This then triggered the move by the government to now consider the gross sales amount as the new reference for tax deductions claims by donors. This reference is very necessary to get genuine claims for deduction. By this process people get what their old car is worth of. The car donations now require stringent measures for its lawful processing.

1 Comment for 'Tax Credits From Car Donations'

    January 11, 2011 | 3:51 am

    [...] Helping America Cars Helping America Charity » « Tax Credits From Car Donations Donate A Car To Cars Helping [...]

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